How to Calculate Car Insurance Premium: A step-by-step guide to calculating your own car insurance premium

For every responsible car owner in India, acquiring car insurance is vital but it can be quite a task when it comes to determining the cost/premiums of the insurance. In order to help you make informed decisions and for you to accurately estimate your coverage costs, we will break down the important factors to consider in this insightful blog.

Getting familiar with Car Insurance

An individual is protected from unpredictable events such as accidents, theft/burglary or damage if he has car insurance policy. To ensure financial assistance in such scenarios, you pay a premium. The cost of your premiums may, however, be impacted by multiple variables.

Key Influencers of Your Premium

• Vehicle Type:

Due to elevated costs of repairs for high-end luxury vehicles, they incur higher premium costs. Manageable premium rates are for economical cars such as hatchbacks.

• Distance Driven:

Premiums can also be influenced by the amount of distance you have driven. Pay as you drive is a type of insurance the calculates the premium you will be paying as per the distance you have driven.

• Location:

Your premium range can be affected as per the location your car is registered in. In densely populated or high-risk areas, your rates could rise, whereas they could decrease in less populated areas.

• No Claim Bonus (NCB):

You might save around 50% on your own damage premiums by qualifying for NCB due to not making any claims in the previous year.

• Coverage Options:

  Opting for comprehensive car insurance coverage increases your expenses but protects your vehicle along with the mandatory Third Party Insurance.

• Additional Features:

Adding extra coverage options such as zero depreciation cover and roadside assistance may result in higher premiums.

Steps to Estimate Your Premium

1. Select Your Coverage:

3rd-Party or Comprehensive Coverage is completely your choice

2. Determine Your IDV (Insured Declared Value):

The current market value of your vehicle affects both the premium and compensation in the event of total loss.

3. Assess Add-On Options:

Consider optional features and select only those essential to your coverage.

4. Review Your NCB:

If you’ve maintained a claim-free record, you may be eligible for a reduced premium.

5. Factor in Vehicle Details:

Age, make, and model of the vehicle impacts the overall premium.

6. Provide Personal Information:

Age, driving experience, and location also affect the final calculation.

7. Use Online Calculators:

Many online aggregators provide tools to help you calculate your premium based on the provided data.

Cost-Saving Strategies

• Choose a higher voluntary deductible to lower your insurance costs.
• Maintain a clean driving history to prevent costly penalties.
• The installation of anti-theft devices will enhance overall car safety and lower car insurance premiums.

Conclusion

Understanding all the factors that impact your insurance premiums makes it simple to make a well-informed choice and select a customized car insurance policy for yourself.

We are constantly available to assist you. Get in touch with us at 1800 266 9693 or send us an email at support@elephant.in for more information on car insurance options, or just head to Elephant.in!

*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice from before you take any/refrain from any action. Tax benefits are subject to changes in tax laws. Please contact your tax consultant for an exact calculation of your tax liabilities.| EL/BLOGS/24-25/18